Why the one cent / one pence should NOT be abolished

aka, please help me.

I've got a debate tomorrow (not a too serious one, but we're against this crazily clever guy who'll beat us up in the questions section) about

'Should the penny be abolished?'
And we're arguing that it SHOULDN'TSo far, I've come up with points such as-Faith the the country- the penny is a traditional sign of England, and taking that away, even if it seems like nothing once done, is a small but sure step towards the Euro, and a step away from our identity as the British
(p.s. this really isn't what I think. I just need to appeal the the extreme patriots here)

And also a giant bit on economic factors:
I believe that the abolishment of the penny could have serious reprucussions for the economy. The economy as a whole is measured by four key indicators: economic growth, inflation, unemployment and the balance of payments.

If the penny is to be abolished, prices will be rounded up. For example, something costing £2.99 will be rounded up to £3. This may not seem like a lot, but this will affect every single good with 99p on the end of the price. In short, this will affect a lot of goods. Therefore, if the penny is abolished, this will lead to quite a considerable increase in the overall price level, which is known as inflation. Some people say that a little inflation is good for an economy, and indeed, the bank of England set themselves a target of 2.0% inflation, and within 0.1% of this target is generally considered to be acceptable. However! The current level of inflation in the UK economy is 2.2%. Clearly, this is already above target, and above what is acceptable. Furthermore, The Bank of England have just reduced interest rates, which means that since people will be getting less back on their savings, and because loans will have less interest on them, they will be spending more. This in itself will lead to inflation. To abolish the penny would be nothing short of an insult to injury, which could be damaging to the economy, and you and I will feel the consequences. Your money will have less value, since something that you may have been able to buy with £10, you no longer will be able to. Our living standards will be lowered, since we will not be able to afford many of the things we once could. Perhaps the richer among us will still be able to afford what was previously possible, but what about the poor? Surely, it is not fair that the rich are unaffected while the poor are made poorer.

The country is already in murky waters in terms of economic growth. As you may or may not know, there has been a 'credit crunch' in America which has caused somewhat of a crisis and has spread over to Britain. In fact, as things now are, the rate of economic growth is expected to slow from 3.2% to 1.7%. This is a considerable slow down. If the penny is abolished, as I have already said, prices will be rounded up. This means that instead of seeing £9.99, consumers will see £10. Lets face it, these prices are more or less the same, but subconciously, the product priced £9.99, just seems cheaper to us, and therefore we are more likely to buy it. Some people like to think that they are unphased by such pricing strategies, but it does work, otherwise businesses simply wouldn't do it! It is no less of an inconvenience to them than it is to you. Anyway, because of this increase in price, people will on average buy less. This means that the total demand for goods and services will go down. If this happens, the national income could stop growing as much, or even decrease. This means that the country could go into a recession, especially with the economy being as vunerable as it currently is. You may be wondering what a recession would actually entail for you and I. The answer is that it would significantly affect our lives. Firstly, there would be widespread unemployment. How would you feel about it if your parents were made redundant? Your standard of living would decrease. If you still even have a job, it is likely that you would be paid a lot less. You may think that I am exaggerating when I say that the country could go into a recession. And yes, indeed, it is quite unlikely, but by no means impossible. The current economic conditions are uncertain ones, and to abolish the penny would be not only unneccessary, but extremely dangerous. And in addition to the uncertain future regarding economic growth, inflation, and unemployment, the UK has a current account deficit of over £80bn, which means that we are, as it were, living beyond our means and importing substancially more than we export. So this means that all 4 indicators of economic performance are at risk. Furthermore, the UK boasts 15 years of stable and healthy positive economic growth, which is unprecedented, so it really is quite a matter of national pride. Is it really worth putting the economy, your standard of living, and national pride in jeaporady to get rid of a mere inconvenience?

(But it's kind of exagerrated, so I'll shove at the end that even if it might not be massively devastating to the economy, it's still a irresponsible and unnessecary move)

Why shouldn't we abolish the penny? 'Cos when I go into Tesco and buy... say a packet of beef jerky for 99p, or I buy something that means the change will involve a penny......... I damn well want my fucking change! Its my money, and I want it back!

A penny is no more obsolete than the 2p or 5p coin, its worth fuck all, but is necesary so that correct change may be given.

If anything, its the most important coin in the ecconomy, since no matter how much the value, it is in theory always possible to pay it in pennies. You can't make 99p in 2p coins.

And yes, I'm the sort of person who will stop to pick up a penny on the street.

Yeah, but the argument the opposing team will put on is that everyone can simply raise the price to round it up, and even if there IS inflation because of this and people will buy less if they see $10 instead of $9.99, demand will go DOWN and therefore inflation would cancel itself OUT.

Which I really hope they won't pick up on.
Otherwise I'm screwed.

And even if I say that it'd be a nusiance to round every single thing ending in 9 or 6 up, they'd just say it's for the greater good of getting 'rid of the annoying penny' since basically EVERYONE who's gonna be hearing the debate HATES the penny D: !!

Lisa I was walking home with Steven Wenham today and his argument was actually like hardcore. Oh and you know when I said he may not notice the loophole with the whole inflation thing? Oh, he noticed it alright.

Kim.
I nearly died when I read that.
WHY?
You said it was like university level understanding!
Dyou remember what he said in his argument??

p.s. WE'RE SCREWED

Oh and also, I'll have absoloutely NOTHING to say when he points that out in the Questions section thingy.
I might just slit my wrists or something just after I finish my speech to avoid that.

Lol it's not university level at all, it's pretty basic, I was just trying to calm your nerves ^__^'

Well he said that companies may actually round DOWN. Basically because you know there's the psychological effect of £4.99 compared to £5.00, so he said instead of rounding it up to £4.99, they would round down to £4.95 to preserve the whole psychological effect thing. My counterargument for this was the example of the euro being introduced into the eurozone and basically firms took advantage of this and all increased their prices when the euro was introduced basically because nobody would notice. So basically the same thing will happen - firms will take any possible oppurtunity to maximise their profits. If you say that he MAY start going into price elasticity of demand, but I doubt he will make that connection. If he does we're screwed, basically.

"So the government should go against the market to say how prices should be rounded ? Blaspehmy ! Wait until McCarthy comes, you communists pigs !"

^ Maybe this would work ?

I don't think the audience will like me calling them communist pigs xD
I might use it if it starts getting desperate though?

p.s. kim YOU WERE JUST TRYING TO CALM MY NERVES?
and also omg i am so using that argument if he says that. i dont think ill confront him about it though incase he really does notice the elasticity thing.

which is most likely, seeing as his surname is Wenham, and his first name in Steven.